SANGAM

Garment exports sink to zero

 

 SANGAM PRASAIN

KATHMANDU, JUL 05 -

Long plunging garment exports to the US have hit rock bottom with not one piece being shipped in June. Nepal's readymade garment manufacturers received zero orders from the US during the month.

Statistics of the Garment Association of Nepal (GAN) show that garment exports in the first six months of 2010 recorded a decline of 38.9 percent. According to GAN, exports to the US amounted to US$ 2.19 million during the review period. Exports during the first six months of 2009 were worth US$ 3.59 million.

Exports to the US have been consistently declining since the elimination of quotas in global apparel trading in 2005. The decline in exports to the US in the last four years has pushed Nepal's garment industry to the verge of collapse.

Even though exports to the US had grown by around 25 percent in January 2010, the last five months have been dismal. According to GAN, exports have nosedived by 90 percent during the period 2005 to 2009.

Garment manufacturers are not surprised by this massive decline. "This is not a new story for the garment industry," said GAN past president Kiran Sakha. "Manufacturers and exporters both have lost hope due to the constant labour unrest and bandas that have crippled production."

"This was bound to happen," said trade expert Ratnakar Adhikari. He added that Nepali readymade garments had been losing competitiveness in the US market. "Garment manufacturers and exporters should look to other markets including the EU rather than relying on the US market only," said Adhikari.

With Nepal not being able to get duty-free access for its readymade garments in the US market, the only hope is the Trade and Investment Framework Agreement (TIFA) which Nepal and the US are to sign in the near future. TIFA has provisions that will help Nepal to gain favourable market access in the US.